Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: NUMBERS INCLUDED AT BOTTOM OF QUESTIONS PLEASE USE THOSE NUMBERS

Req: 5A The sales manager is convinced that a 8% reduction in the selling price, combined with a $28,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager is right, what would be this year's operating income if his ideas are implemented? (Do not round intermediate calculations.)

Req 5B The sales manager is convinced that a 8% reduction in the selling price, combined with a $28,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager's ideas are implemented, how much will operating income increase or decrease over last year? (Do not round intermediate calculations. Decrease amount should be input with a minus sign.)

Req 6 The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $36,000 operating income as last year?

Variable expenses 144,000

Contribution margin 216,000

Fixed expenses 180,000

Operating income$36,000 Sales (18,000 units)$360,000